Aug. 12, 2015
Congratulations on getting your house under contract! We work hard to make the next steps as easy for you as possible which is why you won't even need to attend closing. Please remember that each transaction is unique and comes with a different set of players including inspectors, Closing Attorneys, title insurance companies, etc. So use this as a guideline but make sure you ask us if you have any questions.
Your contract contains a period of time during which the Buyer may conduct inspections. This is called the Due Diligence Period in North Carolina and the Repair Procedure in South Carolina, though you will commonly hear the terms used interchangeably or referred to as the Inspection Period. For your convenience, we make every effort to ensure that all inspections take place on the same day and as a general rule, it's preferable that you are not home. Should the Buyer request any repairs following inspections, we will negotiate the best possible agreement and coordinate any required repairs. Remember that during this period, the Buyer may terminate the contract and receive a refund of the Earnest Money Deposit.
Earnest Money Deposit and Optional Due Diligence Fee
The Buyer's Earnest Money Deposit will be deposited with the Escrow Agent which is typically the Buyer's Agent's Firm or the Closing Attorney. This money will be credited towards the purchase price at closing unless the Buyer elects to terminate the contract during the inspection period. If the Buyer does not close and is in breach of the contract, the Earnest Money, in most cases, will be forfeited to the Seller.
North Carolina Contracts may include a Due Diligence Fee. If a fee has been agreed upon, it is non-refundable. A check from the Buyer payable to the Seller will be delivered to the Seller who should immediately cash or deposit the check. The amount of the fee will be credited to the Buyer at closing.
If the Buyer is financing the purchase with a mortgage, their lender will require an appraisal. The appraiser's job is to ensure the property is worth the price upon which the Buyer and Seller have agreed. In order to do this, the appraiser will visit your home (it's OK if you are there) and prepare an appraisal report. All financed contracts are effectively contingent upon the appraised value coming back at or above the purchase price even if the contract does not contain an expressly written contingency. Thus, if the property fails to appraise, the Buyer will be unable to obtain the loan and therefore unable to close. Note that unless the property fails to appraise, we typically do not get a copy of the appraisal report.
Seller Attorney Preparation
Our attorney will prepare the documents that you are required to provide to the closing attorney. We encourage Buyers to select our attorney as the closing attorney in which case their office will handle the entire transaction. Either way our attorney will prepare your Deed, Lien Waiver, and other documents and we will meet with you to sign and notarize those documents. This is the step that eliminates your need to attend closing.
Closing Attorney Preparation
The Closing Attorney selected by the Buyer will require some information from you in order to prepare for closing including mortgage account numbers, social security numbers, forwarding addresses, etc. They will send us a form upon which to provide this information which we will forward to you.
The Closing Attorney will also prepare the HUD-1 Settlement Statement which is a form that itemizes the financial aspect of the closing. This is typically available the day of or the day before closing, however new regulations will soon require the HUD to be available at least 3 days prior to closing.
Final Walk Through
The Buyer will schedule a final walk through just prior to closing. The purpose of this is to ensure that the property has been emptied of all personal items, is clean, and is in the same condition as when the contract was agreed upon. If repairs were agreed upon and not previously verified, the Buyer may also verify those repairs have been completed.
Remember that the closing date is a TARGET DATE. Closing dates can, and often do, change. On the day of closing the Buyer will go to to the closing attorney's office to sign their documents and complete the transaction. On occasion there will be documents requiring your signature that are not available until the day of closing so we ask that you have access to a scanner or fax machine on the closing date. The sale is finalized when the Deed is recorded at the Register of Deed's office and your funds will be available afterwards. (Note that in South Carolina funds are available as soon as both Buyer and Seller have signed - you do not need to wait on the deed to be recorded). Generally you can pick up a check from the Closing Attorney's office or have it mailed to you. For a fee, the attorney can wire the funds to your bank account.
Can I Start Packing?
In a word, no. Contracts go through phases of strength that increase as we move through the closing process towards the closing date. Since the Buyer can generally terminate with little to no penalty during the inspection period we advise waiting until at least this is over before you begin packing. Once the inspections and any necessary repairs are completed, the contract is much stronger and rarely at this point does one not close, so you are certainly safe to begin preparing to move. Once the appraisal is back, the contract is stronger still, and it's again stronger once the Buyer's loan has been fully approved. Ideally, you would wait until we have the full loan approval, however that isn't always feasible, so our advice is to wait as long as you comfortably can to start packing while allowing ample time to finish before the closing date.
When Do I Have To Be Out?
Please plan to be 100% moved out by 5:00 PM the day before the Closing Date. If you cannot do this, please let us know as soon as possible so that we can be aware and prepared. Please schedule your utilities to be disconnected the day after closing. Disastrous things can happen if utilities are off even for a short while (such as ice from an ice maker melting and leaking onto the floor), so scheduling the disconnect for the day after closing protects you. We will have advised the Buyer to connect the utilities for the day of closing.
What Else Do I Need To Know?
That's really about it. If you want to use our complimentary moving van, please make sure to call and reserve a time.
Otherwise, just relax and let us take care of the details.